On February 25, the NEOSCC Board will be voting on the the Vibrant NEO 2040 Vision, Framework and Action Products. With just under 40 days to the vote and 41 initiatives in the vision, we thought it would be good to create a countdown to the vote. Everyday over the next 5 weeks, we will be sharing an “Initiative A Day” with you so you can gent a better understanding of the vision and framework! If you would like to read all of the Initiatives, you can download them here Vibrant NEO_Recs&Init_010114.
These recommendations, initiatives, and products, are not one-size-fits all and some aspects of the initiatives won’t be applicable everywhere in the 12-county region. The Vibrant NEO 2040 Vision, Framework and Products are intended inspire and guide decision-making at the Metropolitan Planning Organization (MPO), Council of Government, and local levels to ensure that land use, transportation, and environmental considerations are simultaneously addressed by their processes. Ultimately, the implementation of Vibrant NEO 2040 is up to Northeast Ohio’s communities and residents. But regardless of the applicability of each initiative to any particular part of the region, the goal for each community within the Vision is the same: stability, prosperity, and a high quality of life for all of its residents.
Recommendation 1: FOCUS NEW RESIDENTIAL AND COMMERCIAL DEVELOPMENT ON SITES WITHIN ESTABLISHED COMMUNITIES
Initiative 1.1: Encourage infill and redevelopment through the use of tax credits and other direct and indirect public incentives.
WHAT THIS MEANS. Municipalities have a number of tools at their disposal to incentivize redevelopment and infill. Federally-funded tools include Community Development Block Grants, New Market Tax Credits, Low Income Housing Tax Credits, and Historic Tax Credits. State incentives exist through JobsOhio grants, tax credits, and the Brownfields fund. Local incentives can take the form of tax abatements, designation of tax-increment financing (TIF) districts, and capital investment in new infrastructure or infrastructure improvements.
WHY THIS IS IMPORTANT. Application of incentives is a critical element of redevelopment and infill development project finance. These projects, generally more fiscally sound for municipalities, are often difficult propositions for developers given the higher up-front costs of building on existing urban land. Factors driving this include presence of contamination and the possibility of opposition of projects by current neighbors, both of which municipalities are obligated to address, thus lengthening the development negotiation process. Other factors can include land assembly costs and reluctance of lending institutions to extend financing to project proponents. Availability of financial and tax incentives are thus crucial to offsetting the costs imposed by the greater friction developers encounter in delivering infill or redevelopment projects.
GETTING IT DONE. Municipalities must prioritize the incentives they make available to projects that intelligently reuse and “upcycle” urban land. When this is not enough, municipalities should consider organizational solutions, encouraging the formation of community development corporations, business improvement districts, and other intermediary entities that can organize the interests of property owners and facilitate the project delivery process. MidTown Cleveland, Inc., a community development corporation in Cleveland, is an example of this. MidTown Cleveland has worked closely with the City of Cleveland to deliver many successful redevelopment projects, employing innovative financing methods and assuming some predevelopment costs to complement traditional subsidies .
Municipalities must also explore policies and financing structures and, where applicable, pursue changes to policy that can extend redevelopment and infill development benefits once thresholds are reached. These thresholds can include exhaustion of candidate structures for adaptive reuse or exceeding specific income limits, both of which are important benchmarks for leveraging state and federal tax credits.
One potential tool is the Special Improvement District (SID). Enabled by the State of Ohio in 1994, SIDs are mechanisms that permit stakeholders in an area to provide funding for that area’s development. Property owners pay assessments on their property value, which provide the resources needed to create enhanced services for the district. SID-supported services do not replace existing city services, but augment them in ways that strengthen the area’s economic viability through incentives, programs and working with local government. SIDs are in use throughout the country in over 1,200 cities, including communities in Northeast Ohio such as Akron and Cleveland.
Downtown Cleveland Alliance (http://www.downtowncleveland.com/about-us/special-improvement-district.aspx)
Downtown Akron Partnership (http://www.downtownakron.com/about/special-improvement-district)
Ohio Revised Code, Chapter 1710: Special Improvement Districts (http://codes.ohio.gov/orc/1710)
University Lofts: Located on the Euclid Corridor—a Bus Rapid Transit Route—University Lofts is a mixed-use residential development within Cleveland State University’s Campus. An infill vacant lot and restored National Historic Registered properties were redeveloped as apartments and ground floor retail with State and Federal Historic Tax Credits and New Market Tax Credits.
Tremont Pointe: Revitalized Tremont Point is an anchor site in a burgeoning mixed-use neighborhood that was developed through the use of Low Income Housing Tax Credits and the federal HUD Hope VI program. The redevelopment replaced 241 aging public housing units that were cut off from the surrounding neighborhood with a mixed-income village, tied into the historic emerging neighborhood. 189 new units were constructed that complement the surrounding city fabric and connects residents to their community.
Potential Lead: Municipalities
Target Community:Strategic investment areas, asset risk areas, cost risk areas
Implementation Complexity: Low